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Chapter 2. The Franchise Relationship Mo... > The Dynamics of the Franchisee–Franc...

The Dynamics of the Franchisee–Franchisor Relationship: How Does the Franchise Entrepreneurial Alliance Adjust for Changes in the Market?

The final area of analysis in the FRM relates to the dynamics of the relationship and the mechanisms that help you manage change. The dynamic nature of the FRM is essential for your success. As the market evolves, you must shape your franchise system to efficiently respond. When market changes affect return to either of the parties, the fairness of the economics of the alliance must be reassessed. Pizza Hut franchisees legitimately asked, “Will pizza delivery hurt or enhance my economic position?”

ServiceMaster was founded as a moth-proofing company in 1929 by Marion E. Wade, a former minor league baseball player. ServiceMaster expanded to carpet cleaning in 1952, establishing one of America’s first franchise businesses. In 1962 the company took its expertise to the health-care arena and pioneered what is now known as outsourcing. In 1980 it began serving the education market and expanded work offerings to business and industry. Changing with market demand transformed the moth-proofing company into a franchise giant and a Fortune 500 company.


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